Luxury real estate firm John Daugherty Realtors is being sold to Douglas Elliman, the New York brokerage that helped launch Houston into an elite group of high-end housing markets when it expanded here earlier this year.

The deal, confirmed by Elliman Saturday, gives the company a foothold in Texas, where it plans to expand to other markets, and a head start in Houston with a roster of some of the city’s top real estate agents.

“Douglas Elliman is the giant of what we are in Houston,” John A. Daugherty Jr., founder of the 52-year-old local firm, said in an interview. “They’re the giant in the U.S. and the world.”

Elliman, led by New York investor Howard Lorber and known for its multimillion-dollar listings and celebrity agents, expanded into Houston over the summer through a partnership with Houston-based Sudhoff Cos. Sudhoff, which specializes in the high-end condominium market, has rebranded as Douglas Elliman Texas.

By acquiring the Daugherty firm, Elliman retains one of Houston’s stalwart luxury brands. Its 125 agents sell some of the most expensive properties in the city for its wealthiest residents.

Elliman will keep the Daugherty name, though new marketing materials will reflect that it is now part of the larger company.

The deal, for which terms were not disclosed, caps a turbulent year in the residential real estate industry in which agents fled to competitors, legacy firms consolidated and new business models rattled the traditional practices of how properties are bought and sold.

Daugherty has not been immune to those changes.

A week ago, the firm lost two of its top agents, who were responsible for more than $210 million in sales, to Compass, a New York-based competitor that launched in Houston last year.

Laura Sweeney, the No. 1 agent in the city, and Lisa Kornhauser, another top producer, left Daugherty after each spending some 20 years with the agency.

Top-producing agents are often approached by other firms, and Daugherty said this is not the first time it has happened.

“We survived and became better and stronger,” said Daugherty, who will become chairman of Elliman’s Houston brokerage. His longtime chief operating officer Cheri Fama will become president.

Smaller, independent brokerages are having a harder time competing with national firms that have the financial backing to serve their agents and customers amid a changing market dynamic, said Mike Mahlstedt, an agent with Compass who was one of the first to join the company in Houston after leaving a traditional firm.

“A lot of that is about technology and marketing, which is very expensive,” he said. Compass, for example, has a service that fronts the costs of staging, painting or even full-blown renovations.

The deal to buy the Daugherty firm had been in the works for about a year and is expected to close in January. Sudhoff said he reached out to Daugherty when he was negotiating his own deal to partner with Elliman. Since Sudhoff’s business focuses on the smaller condominium market, he was looking to align with a traditional brokerage.

Elliman operates 120 offices in the country’s largest luxury housing markets, including Beverly Hills, Calif., Aspen, Colo., and the Hamptons.

The Daugherty firm has 125 agents and two offices, one in the Galleria area and one in The Woodlands. Its agents were involved in more than $1.1 billion worth of sales last year, up less than 1 percent form the year before, ranking No. 7 in the market by volume, according to data from Real Trends.

“I thought the timing was right,” Daugherty said. “The world is getting smaller and the sophistication and the technology that’s coming into our world is just going to make it better for all of us.”

By combining with Elliman, Sudhoff said Daugherty’s listings will have much wider exposure.

“Every single listing over $1 million that John Daugherty has gets translated to 22 diff languages and spread throughout the world,” he said, citing Elliman’s marketing reach through its alliance with London-based Knight Frank Residential.

Daugherty leaders told their agents about the sale of the company Friday and was planning another gathering over wine and cheese Saturday afternoon to answer more questions.

They're still processing the news, Fama said. "Our agents’ well being is at the very forefront of our concerns and cares.”

Nancy Sarnoff covers commercial and residential real estate for the Houston Chronicle and the paper’s two websites: Chron.com and HoustonChronicle.com. She also hosts Looped In, a weekly real estate podcast about the city’s most compelling people and places. Nancy is a native of Chicago but has spent most of her life in Texas.